Carbon Pricing 1. An Introduction Sources of emissions - such as - - PowerPoint PPT Presentation

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Mar 23, 2023 401 likes •509 views

Carbon Pricing 1. An Introduction Sources of emissions - such as power plants, vehicles, factories and homes - have to pay a price for each tonne of carbon dioxide (and sometimes other greenhouse gases) that they put into the atmosphere Tax

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Carbon Pricing

1. An Introduction

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Sources of emissions - such as power plants, vehicles, factories and homes - have to pay a price for each tonne of carbon dioxide (and sometimes other greenhouse gases) that they put into the atmosphere Tax or Emissions Trading System

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Putting a price on emissions creates a direct financial incentive to reduce them

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Coal Gas Approximately 50-60% reduction on switching from coal to gas CO2 CO2 Total cost increase may feed through to consumers

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Source: World Bank State and Trends of Carbon Pricing 2017

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Source: World Bank State and Trends of Carbon Pricing 2017

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Some possible objections to carbon pricing

Reducing competitiveness?
Too expensive for poor households?
Just another way for governments to raise revenue?
Excludes other policy instruments?
Does not work in practice?
Commoditising nature?

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Conclusions

Carbon pricing creates a financial incentive to reduce emissions
It is increasingly widespread around the world
It can be effective if prices are at adequate levels, but too often

they are not

Careful design is needed